TPR publishes diversity action plan following 'worrying' research

The Pensions Regulator (TPR) has published a new action plan to improve diversity and inclusion across trustee boards, after “worrying” new figures suggested that trustees are not prioritising this area.

The "concerning" research from the regulator revealed that just 10 per cent of defined benefit (DB) and 14 per cent of defined contribution (DC) schemes record any trustee diversity data.

Both DB and DC schemes were more likely to record trustee gender and age, although DC schemes typically gathered a wider range of data in addition to this, with between 8-10 per cent of DC schemes collecting gender identity, sexual orientation, disability, ethnicity, religion, and educational attainment, compared to 5 per cent of DB schemes.

However, this data may not be being properly utilised, as TPR found that two-fifths (40 per cent) of DB schemes and nearly half (47 per cent) of DC schemes did not identify any uses for the trustee diversity data which they captured.

Around 41 per cent of DB schemes and 30 per cent of DC schemes said that they had not collected trustee diversity data as they had not thought about it, while 35 per cent of DB schemes and 43 per cent of DC felt there was no need to capture this information.

The regulator also found that the majority of DB schemes don't intend to start collecting trustee diversity data in future, with 74 per cent of DB schemes that did not capture diversity data having no plans to do so, while the remaining 16 per cent were unsure.

TPR executive director of regulatory policy analysis and advice, David Fairs, highlighted the findings as demonstration that trustees have a "long way to go towards embracing the importance of diversity and inclusion", stressing that "the status quo is not acceptable".

"Trustee boards that are not diverse risk knowledge gaps, entrenched ideas, biased thinking and poor decision making which puts savers at a disadvantage," he continued.

“We want to see trustee boards with a wide range of perspectives, knowledge and skills and where everyone has the opportunity to contribute and challenge from different perspectives."

The Equality Diversity and Inclusion action plan therefore outlines the steps TPR, in partnership with the Diversity and Inclusion Industry Working Group (IWG), will take to encourage and support trustees to recruit diverse candidates and create a culture of inclusion.

As part of the plan, the regulator will set "clear" expectations on diversity in its upcoming Single Code of Practice, as well as publishing guidance in partnership with the IWG to help trustees understand and meet these expectations, to be published "at the end of this year or in early 2023".

In addition to this, TPR will develop a mechanism for how it will collect and use diversity data in the longer term to measure success, and engage directly with trustees to identify the barriers to diversity and highlight best practice.

“We have worked closely with the industry working group to develop this action plan. It sets out clear steps TPR together with the industry will take to help trustees bring about the change that is clearly needed," Fairs added.

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